Can maintenance fees be tax deductible?

According to the IRS, maintenance on your vacation rental property is a deductible operating expense. However, make sure what you’re doing is actually maintenance versus a repair. The IRS counts both as deductions, but requires you to list them separately on your Schedule E. A simple rule of thumb: maintenance is done to prevent something from breaking, while a repair is completed after something has already broken.

Can I deduct utilities on my rental property?

Utilities make up a large financial responsibility when managing your vacation rental. The cost of providing internet, water, electricity, phone service, and other service essentials can add up to thousands of dollars a year. Fortunately, these costs are counted as deductible expenses come tax season (if you qualify for deductions based on the 14-day rule).

Can you write off vacation home property management fees?

When you hire a property management company, such as Vacasa, to manage your vacation home, consistently market to guests, handle guests requests, clean, and maintain your property, their fees are considered tax deductible for eligible homeowners. Same goes for any other professional service you work with to maintain your property, including professional housekeepers, hot tub cleaning services, or electricians.

Is Airbnb furniture tax deductible?

Yes, furniture—and any costs to repair existing furniture—can be a deductible expense come tax time. The same applies to amenities and appliances you purchase for your guests, such as a toaster, a TV, bed sheets, and towels. Larger items are usually entered as assets that depreciate. However, if the item costs less than $2,500, you can elect to write off the item as an expense, rather than an asset. This allows you to lower your income by a larger amount that year instead of depreciating the asset over several years.

10 Vacation Rental Tax Deductions

There are countless perks of owning a vacation home—the additional income, the option for an easy getaway, and the possible appreciation of your property over time. And, if you rent out your home for at least 14 days per year, you might also be eligible for the extra benefit of writing off some—or all—of your vacation rental expenses to reduce your taxes.

Even on the best of days, the short-term rental tax code can seem overwhelming and confusing. But, taking the time to determine what’s deductible can help you maximize every tax savings available to you. While many expenses related to your vacation home may seem small, they can certainly add up.

Not sure what’s deductible or not? You’re not alone. As a basic rule, tax deductible expenses must be:

Ordinary and necessary
Directly related to your rental activity
Reasonable in amount
Incurred during the tax year

For this upcoming tax season, consider these 10 tax deductible expenses for your vacation rental property. And don’t forget—we’re experts on vacation rentals, not tax law, so we always recommend that you consult a professional financial adviser at tax time.

1. Transportation and travel expenses

If you travel away from home to conduct maintenance or repairs at your vacation rental, you may be able to deduct travel expenses such as accommodations, mileage, meals, and airfare. This could also include travel to attend seminars, classes, trade shows, or conventions that will benefit your vacation rental business.

2. Vacation rental cleaning costs

As someone who manages their own vacation rental knows—cleaning can really suck your time and energy. If you decide to hire a professional housekeeping service to clean after every check-out, their fees and the cost of any cleaning supplies are considered tax deductible.

Vacation rental tip
When working with a vacation rental property management company, make sure they offer professional house cleaning as part of their services so you’re not stuck having to shoulder the responsibility of hiring and managing house cleaners.

3. Homeowner or condo association (HOA) fees

Those fees you pay to your HOA or condo association do more than just cover snow removal, landscaping, and pool maintenance. You may be able to write off those monthly or annual dues to offset your tax liabilities.

4. Vacation rental management fees

If you work with a vacation rental property manager, such as Vacasa, to oversee marketing, booking, guest services, and maintenance of your property, their fees or commissions can be classified as tax deductions.

5. Vacation rental supplies, appliances, and furniture costs

Bed sheets, lamps, dinnerware, and beds for all your guests. Completely furnishing and stocking (and restocking) your vacation rental can rack up a hefty bill when all is said and done. Luckily, those purchases count as possible deductions. Same goes for whatever you pay to maintain your amenities, such as pool and hot tub cleaning services and supplies.

6. Vacation home maintenance and repair costs

Over time, things can break, crack, and need fixing. Any funds you pour into repairing or maintaining your rental property—like fixing leaky faucets or patching the roof—may be deductible at tax time.

Did you know?
Vacasa handles many common repairs and maintenance tasks, so you don’t have to.

7. Vacation rental insurance costs

You rely on your picturesque mountain cabin or beautiful beach cottage to attract guests and earn rental income. So, it’s crucial to protect it from any accidents or natural disasters with the right insurance policies. Though these insurance costs can be high, fortunately they’re counted as deductible vacation rental business expenses.

8. Utility bills

Utilities make up a large chunk of your monthly spend that keeps your vacation rental up and running. Luckily, these bills could be deducted for the months you rent out your property. This includes water, electricity, gas, internet, cable, and trash removal. Together, these could add up to some solid savings come tax time.

9. Vacation rental marketing service fees

To reach the largest audience of travelers, you’re most likely posting your property to Airbnb, Vrbo, and other vacation home listing sites. Here’s what to look out for: Some vacation rental sites don’t charge you flat fees, but rather take a percentage from every booking as their commission. For example, Airbnb charges most property owners a 3 percent “host service fee,” which is taken off the top of what your guests pay for their stay. Keep track of every fee that is being paid back to these sites, as they can be considered deductible expenses on your taxes.

Did you know?
When you work with Vacasa, we’ll handle every element of marketing your vacation rental. Think professionally written descriptions, expert photography, and maintaining your listing on channel partner sites like Airbnb, Booking.com, and Vrbo.

10. Accounting fees

While you can easily file your personal taxes, completing tax paperwork accurately and thoroughly for your vacation home is a whole new level of chaos. Unless you’re prepared to memorize the vacation rental tax codes front and back, save time (and your sanity) by working with a tax or accounting professional. Their fees may be deductible.

Vacation rental tax tip
Save copies of every bill, canceled check, and receipt pertaining to your vacation home. The key to saving big come tax season is keeping accurate and thorough records.

Want even more help running your vacation home as a lucrative investment and business? We’re here to assist with everything from marketing to pricing to answering guests' requests. Let’s talk.

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10 tax deductible vacation rental expenses